35 mmcfpd 15 Year Contract with Altenesol is DEADWord on the street is that the Altenesol contract is dead.
17.5 mmcfpd was contracted to come on December 2016.
Another 17.5 mmcfpd was contracted for delivery starting Decemer 2017.
If this news on Altenesol does hit the market, the research analyst will definitely be revising their estimates lower and will be skeptical of any future contracts. Institutions will use it as one more excuse not to own CNE. CNE will continue to trade at a steep discount to their peers.
Bad news is that the company loses this growth for the time being and will need to try to negociate new contracts for this gas.
Good news is CNE won't have to make a $13 million payment to Altenesol later this summer.
If in fact this news is true, how can CNE continue to promote the contracted gas growth.
Lots of execution risk...lots of financing risk ...and lots of resource risk in this story.
Seldom does one well prove up as many reserves as Petrotech has estimated. Petrotech has a very bad name when it comes to reserve estimates, most in the business discount Petrotech's numbers by at least 50%. Clarinette 2 if successful could still result in a writedown of reserves if it doesn't flow as modeled. If it's a duster the whole business is at risk with close to $300 million of debt. if it produces as modeled, then no reserves will be added as it is very close to the original well and surely was included the proven plus probable reserve area.
Canacol is losing money every month in the current oil price environment, if the pipeline is not constructed on time the chance of further dilution increases greatly. No one thought Canacol would issue stock to pay back the convert but they did and that must have meant they were not very optimistic about there balance sheet strength in the near term.
The financials for year end June 2015 are going to be horrible, we have seen how these effect the stock price.
If CNE was a great investment at this price, then why is management and Board members not backing up the truck and buying shares....they aren't in blackout because Kevin Flick has been buying small amounts....leads me to believe that management and board don't believe in what they are trying to sell to investors.